STATE WATCHDOGS: Privatizing buses a $2M bonus for cash-strapped Minnesota school district

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Photo - A suburban Minnesota public school district expects to save millions of tax dollars by privatizing its bus system. The decision helps avoid cuts in classroom budgets but has upset members of the SEIU local that represents some of the bus drivers. (Photo courtesy of Watchdog.org)
A suburban Minnesota public school district expects to save millions of tax dollars by privatizing its bus system. The decision helps avoid cuts in classroom budgets but has upset members of the SEIU local that represents some of the bus drivers. (Photo courtesy of Watchdog.org)
Watchdog,Tom Steward

ROBBINSDALE, Minn. -- A suburban Minneapolis school district is learning a valuable math lesson that could multiply budget savings long after the class of 2013 moves on.

With increasingly limited resources and tighter than ever budgets, Robbinsdale Area Schools seized an opportunity to cut costs and save taxpayers more than $1 million annually by getting out of the school bus business.

"Every district has its own unique set of circumstances. We're committed to providing families what they need but the ultimate bottom line is what's best for kids and we're trying to keep as many dollars in the classroom as we can," said Tia Clasen, a spokesman for Independent School District 281.

The Robbinsdale proposal to privatize the district's fleet of 109 buses turned controversial last spring as the focus pivoted to the union jobs of 26 full-time and 80 part-time bus drivers.

At the start of the new school year, however, the keys to most of the district's buses were turned over to a non-union private contractor, First Student Inc., but not without a bitter dispute with the Service Employees International Union Local 284.

Now halfway through the first year of outsourced bus service, school board members have received a glowing report card on the level of savings being achieved.

The district will save $1.5 million this school year in transportation costs, plus $500,000 a year in capital costs for replacement buses, for a total of about $2 million in savings.

"Our district had one of the most expensive transportation systems in the state," Clasen said. "Contracting out transportation services provided our district with the opportunity to redirect funds back into the classroom while still providing our students with safe and reliable transportation to and from school."

Altogether, the district expects the transportation budget to total $7.9 million compared to $9.6 million last year, a decline of 18 percent. During the next four years, Robbinsdale schools expect to save more than $5 million in transportation costs with an additional savings of more than $2 million in purchases of new buses.

Union officials, however, warn that the rosy numbers may not last.

"SEIU believes the savings is still yet to be seen, (it's) hard to really be certain at this point in the year. Our bigger concern is really the long-term impact and rising costs once the initial honeymoon is over. I have heard from a number of schools that there have been some service concerns and increased numbers of parents picking up kids in lieu of using the contracted services," said Shelly Johnson, a SEIU Local 284representative.

Union members also flagged possible safety concerns in switching to a private contractor, but school officials report no problems to date. In fact, First Student upgraded every bus with new safety features including an electronic reminder system to ensure no student remains on the bus, a GPS system to track the speed and location of every bus in real time and video cameras that continuously record.

While no statistics are available, industry experts estimate about half of school districts operate their own buses, while about half use private contractors. While First Student discusses privatization with school districts periodically, Robbinsdale is one of the few to follow through in recent years.

"Most of the time districts will look into it when their labor contracts are expiring or when they have a large fleet replacement before them," said Dan Muehlbauer, regional manager for First Student.

Robbinsdale Area Schools still own and operate 21 buses with unionized drivers for some routes. Overall, however, it's clear the district is moving in the opposite direction for future transportation needs.

Tom Steward is a reporter for the Minnesota bureau of Watchdog.org.

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